H&M has ambitious water management and recycling plans. But when it's selling 550m items per year, and plans to increase this, is the Swedish retailer really taking its impact on the world's resources seriously? Photograph: Christian Charisius/REUTERS

Happy shoppers: men and women heading to the high street and returning laden with bags of newly bought goodies. That is the image that both economic policy makers and retailers would love to see. A return to the good times.

Fast fashion

Few sectors are more emblematic of today's consumer-driven growth model than the fashion industry. With each new season comes a brand new range of must haves. This "out-with-the-old-and-in-with-the-new" seesaw leaves us more hip and retailers more profitable, but it's costing the planet dear. Take jeans. The cotton that goes into a single pair of Levi's® 501®s, for example, requires almost 1,500 litres of water to grow. Add in millions of T-shirts, jumpers, socks, pairs of underwear … you do the maths.

But before you scowl at the next bag-laden shopper, just check where they're heading. It might just be that they are heading to H&M. Two months ago, the world's second largest clothing retailer introduced a garment collecting initiative in 1,500 stores. Its remaining 1,300 shops will follow by the autumn.

Cecilia Brannsten, project manager in H&M's sustainability team, is responsible for the initiative. The goal is simple, she says: "Basically, we want to change the mindset of the customer [so they] see their old clothes as a resource rather than throwing them into the garbage or letting them pile up at the back of their closet."

If you know M&S's shwopping deal, then you'll know the drill. Customers can go to any participating store with their old clothes and hand them over at the cash desk. In exchange, H&M offers a voucher. In the UK, customers will be able to use the voucher to get £5 off any purchase of more than £30. In other European markets, the deal is 15% off any purchase of your choice.

The Swedish retailer will take any clothes from any brand in any condition, Brannsten insists: "So we will accept everything from old washed-out T-shirts, to underwear to the one sock that you can never find the other pair to."

Recycle, resell or reuse

What happens then? Well, H&M sells the donated clothes to I:CO (short for I:Collect), a Swiss-based recycling start-up, which already counts the likes of Puma and Footlocker on its client list. I:CO then re-sells what it can to the second-hand or vintage markets. Clothes that are in poor condition are either converted for other use, such as cleaning cloths, or recycled into textile fibres.

Brannsten describes the programme as "entirely new" for the company. It's based on offering a service rather than flogging a product (although there is an implicit sales element, as the voucher incentive implies). Second, it's a non-profit making venture. Revenues will go towards covering H&M's running costs. Any extra will be donated to the company's Conscious Foundation for research into full textile recyclability – so-called closed loop materials.

H&M isn't Oxfam, however. It's not entering the hand-me-down market for charitable ends. That's not to say some of its motives aren't laudable. Every year in the UK, an estimated £1bn worth of clothing goes to landfill, the vast majority of which can be recycled. That's a colossal waste. But there are some very hard-nosed business realities at stake here. Most of these revolve around what Branstenn calls the "resource crunch": namely, the increasing competition for (and, in some cases, scarcity of) raw materials such as water, oil and land.

"We want to make new clothes out of old clothes … because we cannot continue to use the resources that we do today. We need to care for the resources that we have already used, so we need to use more recycled materials and preferably closed loop textile recycled materials."

The same logic of dwindling resources is guiding many of H&M's other sustainability initiatives. In January, for example, the Swedish retailer laid out an ambitious, multi-pronged water management plan. By the same token, it's already integrating organic and recycled fibres into its product ranges, touted under the Conscious Collection brand.

The economics of more

It all sounds hunky dory. H&M keeps selling more and more products (last year it shifted an estimated 550m items), we get to update our wardrobes and – by recycling our used goods – the impact on the world's resources remains in check. Only, it doesn't quite work like that. Not yet, anyway.

Branstenn admits to a range of limitations. Getting supplier buy-in is one. Many polyester manufacturers will now offer recycled polyester, but uptake of recycled textiles remains small. Textile recyclers remain few and far between as well.

Technological advances would help enormously. The truth is that the promise of closed-loop textile recycling currently remains exactly that: a promise. Mechanical recycling of natural fibres is the best bet at present, but it's costly and far from perfect. Branstenn points to recent advances in chemical recycling, but admits that the whole fibre recycling field is still not well developed and that 100% recycling will take some time.

"It's not really possible to close the loop on textiles … that's why we want to fill this technology gap between what we want to do and what is actually possible to do today", she explains.

The fashion industry's fundamental problem comes back to the happy shopper. H&M says it want to inspire consumers to make more responsible choices. Encouraging them to recycle is certainly a step forward. Pushing them towards their more sustainable product lines is another. Yet neither option, at present, will save the planet. And as yet H&M shows no desire to scrimp on sales or inventory.

Until full closed-loop recycling is possible and until raw material inputs into making new clothes vastly reduce, there's arguably only one responsible decision for consumers: shop less and share more. Creating happy non-shoppers: there's a challenge to really inspire the responsibly-minded.

Credits

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